The Society for Economic Research on Copyright Issues

Review of Economic Research on Copyright Issues (RERCI)

RERCI Articles

The 'Competitive' Value of Music to Commercial Radio Stations

Review of Economic Research on Copyright Issues, Vol. 4, No. 2, 29-50, 2007

Paul Audley and Marcel Boyer

Downloads:  886


Abstract

Our objective in this paper is to develop a methodology to infer from the behaviour and choices of broadcasters the "competitive" value they attach to the use of music, more precisely sound recordings, and to derive from such an inferred value the proper "competitive" copyright payments to be made to authors, composers, performers, and makers of sound recordings. We illustrate the methodology by applying it to Canadian data. The background is provided by the statement of case and supporting proof presented in the 2004 proceedings before the Copyright Board of Canada on the commercial radio tariff. The results called for a significant increase in copyright payments by Canada's commercial radio industry: the proper competitive copyright payments should be substantially more than double what the industry was paying at the time of the hearings.

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Why Did Schumpeter Neglect Intellectual Property Rights?

Review of Economic Research on Copyright Issues, Vol. 2, No. 1, 69-74, 2005

Mark Blaug

Downloads:  861


Abstract

Joseph Schumpeter is the father of evolutionary economics and the origin of notion that technical change is the key to capitalism as an engine of economic growth. His most famous book is Capitalism, Socialism and Democracy (1942) which develops the thesis that capitalism is always an evolutionary process of creative destruction. When this book was published fifty years ago, there was little solid scholarship on technical advance. Now there is a great deal, so much so that it would take a book to do justice to it. Nevertheless, Schumpeter's book correctly captures many of the stylised facts about technical progress revealed in recent research but, oddly enough, he never discussed, or even mentioned, intellectual property rights and this despite the fact that patent legislation was a prominent subject of debate in nineteenth century economics. This is a puzzle I hope to resolve in this paper.

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Getting Pricing Right on Digital Music Copyright

Review of Economic Research on Copyright Issues, 2018, 15(2), 1-22

Joshua S. Gans

Downloads:  851


Abstract

This paper provides an overview of economic approaches to the pricing of mechanical royalties for copy-protected music works. It argues that principles for such pricing can be provided usefully from principles of pricing access to essential facilities. In particular, the structure of the royalty should be such that the royalty level does not change if the business model of downstream entities (notably, digital music streaming platforms) changes (i.e., neutrality) and the level of the royalty should ensure that the copyright holders receive a return in excess of their next best alternative in reaching consumers (i.e., opportunity cost). Ways of using benchmarking to derive the relevant opportunity cost are then discussed including the use of methods inspired by economic bargaining approaches such as the Shapley Value.

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Fair Copyright Remuneration: The Case of Music Radio

Review of Economic Research on Copyright Issues, Vol. 7, No. 2, 21-37, 2010

Richard Watt

Downloads:  851


Abstract

The issue of what price should be set for the music input to radio broadcasts has been hotly debated recently in several countries, including USA, Canada and New Zealand. Since music is subject to copyright, this is an issue that is of great importance to the economics of copyright. The central point is the fact that, because of the economic efficiency that is gained by collective management and blanket licencing, the copyright holders in music are represented by a single bargaining unit. The ensuing monopoly power is often seen to be detrimental to social efficiency, and so in exchange for allowing the collective to form and operate, the price at which it grants access to its repertory is regulated. The regulated price should be set at a fair and equitable level. In this paper, the Shapley methodology is used to attempt to provide such a tariff.

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Unauthorized Copying and Copyright Enforcement in Developing Countries: A Vietnam Case Study

Review of Economic Research on Copyright Issues, Vol. 4, No. 1, 87-96, 2007

Koji Domon and Kiyoshi Nakamura

Downloads:  833


Abstract

At present, Vietnam is regarded as the most notorious country regarding copyright infringement. China, joining WTO in 2001, has since implemented strict copyright measures. Even though Vietnam has laws covering intellectual property rights, enforcement is almost non-existent. We investigated how unauthorized P2P file-sharing affects copyright infringement in Vietnam. We assumed, before visiting Vietnam, that P2P file-sharing was more popular than pirated CDs and DVDs. However, few people there knew of its existence. Even when they did, they were unwilling to use it. Another astonishing fact was how pirated CDs play a role in promoting singers who relied on stage performances. Singers were not eager to support copyright enforcement. In this paper we consider these situations and explain how such behavior is commonplace in Vietnam.

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Evidence of the Effect of Free Music Downloads on the Purchase of Music CDs in Canada

Review of Economic Research on Copyright Issues, 9(2), 55-78, 2012

George Barker

Downloads:  801


Abstract

This paper examines data on the effects of Internet peer-to peer (P2P) file sharing activities on music purchasing. The data was obtained from a survey commissioned by Industry Canada to "inform Industry Canada's policy development work" regarding copyright law reform in Canada. The paper focuses on an important survey question which has not yet been analysed. Analysis of survey responses suggests that P2P file-sharing is a substitute for legitimate music purchases and has strong negative effects on legitimate music purchases. This contradicts the results of earlier analysis of the data commissioned by Industry Canada first published on Industry Canada's website in 2007 (Andersen and Frenz, 2007), and then subsequently revised and republished as Andersen and Frenz (2010).

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Piracy and the Demand for Films: Analysis of Piracy Behavior in French Universities

Review of Economic Research on Copyright Issues, Vol. 3, No. 2, 15-27, 2006

David Bounie, Patrick Waelbroeck and Marc Bourreau

Downloads:  795


Abstract

The purpose of this article is to identify which, if any, segments of the movie business have suffered from digital piracy. We use a sample of 620 university members including undergraduate students, graduate students and professors to assess the effect of digital piracy on legal demand. A large percentage of respondents get pirated movies from a variety of channels (on P2P networks, intranet, by physical means. . . ). Surprisingly, approximately one third of the pirates declared that watching pirated movies increased their demand for films (for instance, it led them to rent or purchase videos that they would not have rented or purchased otherwise). Using regressions analysis, we find no impact of piracy on theater attendance, and a strong impact on video rentals and purchases. However, movie piracy has no impact on video rentals for respondents who use pre-paid pricing schemes at video-stores.

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Museums, Property Rights, and Photographs of Works of Art. Why Reproduction Through Photograph Should Be Free.

Review of Economic Research on Copyright Issues, 13(1), 1-28, 2016

Alain Marciano and Nathalie Moureau

Downloads:  788


Abstract

The law concerning the reproduction of works of art is unambiguous: the owner of the physical item does not own the right to copy and reproduce it. The copyright or right to reproduce a work of art either belongs to the artist and his/her heirs, or to everybody when the work is in the public domain. However, a large number of museums use their property rights to assume a copyright, i.e. a right to reproduce works of art. These illegal practices are the result of choosing a business model based on the desire to cross-subsidise the upstream market of the services provided to the public with the benefits obtained by monopolising the "downstream" market of the copies or reproductions of works of art. The objective of this paper is to show that this is not efficient. We argue that this strategy conflicts with the mission upheld by museums and prevents certain externalities from circulating in the society.

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Piracy of Intellectual Property: Past, Present, and Future

Review of Economic Research on Copyright Issues, 10(2), 1-26, 2013

Ian Novos and Michael Waldman

Downloads:  781


Abstract

The last few decades have seen enormous growth in piracy of copyrighted goods and, in particular, an enormous growth in piracy of creative works that employ a digital format. In this paper we discuss classic theory related to the piracy issue, provide a brief history of the growth of piracy over the last few decades, and then discuss issues concerning the present situation. We conclude with speculation concerning the future of piracy, where one of our main points is that, at least for the developed world, there are important reasons for believing that piracy is likely to continue to grow.

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The Emergence of Musical Copyright in Europe from 1709 to 1850

Review of Economic Research on Copyright Issues, Vol. 5, No. 2, 3-18, 2008

Frederic M. Scherer

Downloads:  781


Abstract

This paper, written for a conference of the Society for Economic Research on Copyright Issues, explores the history of copyright protection for musical compositions. The first modern copyright law did not cover musical works. The role of Johann Christian Bach, Ludwig van Beethoven, and Johann Neopmuk Hummel in securing legal changes is traced. How Giuseppe Verdi exploited the new copyright law in Northern Italy is analyzed. The paper argues that Verdi, enriched by copyright protection, reduced his compositional effort along a backward-bending supply curve. However, his good fortune may have had a demonstration effect inducing other talented individuals to become composers. An attempt to determine the impact of legal changes on entry into composing is inconclusive. The paper shows, however, that a golden age of musical composition nevertheless occurred in nations that lacked copyright protection for musical works.

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Bargaining Theory and Royalty Contract Negotiations

Review of Economic Research on Copyright Issues, Vol. 3, No.1, 19-27, 2006

Abhinay Muthoo

Downloads:  762


Abstract

This article shows how the principles of modern bargaining theory can help develop a better understanding of contractual terms such as royalties between copyright holders and users such as between an artist and a recording company (or between an author and a publisher). We develop the main principles in a non-technical and illustrative manner.

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Creativity and the Economics of the Copyright Controversy

Review of Economic Research on Copyright Issues, Vol. 6, No. 2, 5-12, 2009

Harold Demsetz

Downloads:  755


Abstract

The debate about copyright law centers on the apparent tradeoff between the creation of new works and the extent to which these works are used once they are created. Economics has been employed explicitly and implicitly to bolster positions taken by those involved in this debate. I do not directly join this debate here, but what I will say is relevant to it. My objectives are different, to draw attention to the neglect of creativity by economists and to describe some of the unique problems this neglect poses for those who use traditional economic models to explain and support the positions they take in this debate. It is no intent of mine to discourage the use of traditional economic models but, rather, to urge greater care in their use.

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Capabilities, Spillovers, and Intellectual Progress: Toward a Human Flourishing Theory of Intellectual Property

Review of Economic Research on Copyright Issues, 14(1/2), 1-38, 2017

Brett M. Frischmann

Downloads:  746


Abstract

Courts, commentators, and even casebooks mistakenly assume that intellectual property laws are fundamentally utilitarian and thus the relevant objective for intellectual property laws is maximizing social welfare. Economic theories of intellectual property dominate while rights-based theories and other alternatives struggle to remain relevant in the discourse. This essay accepts that intellectual property laws are consequentialist, but it mounts a challenge to the utilitarian theories that dominate. Following the path set by Amartya Sen in the area of development economics and borrowing heavily from the Sen's analytical and normative framework - the Capabilities Approach, this essay begins to develop a human flourishing theory for intellectual property.

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The Elusive Symbiosis: The Impact of Radio on the Record Industry

Review of Economic Research on Copyright Issues, Vol. 1, No. 1, 93-118, 2004

Stan J. Liebowitz

Downloads:  746


Abstract

Unlike television broadcasters, who must negotiate with the copyright owners before they can broadcast movies, radio broadcasters need not negotiate with the copyright holders for the sound recordings broadcast on radio. In the United States radio broadcasters have no obligations whatsoever to the copyright owners of the sound recordings (although they do have obligations to the copyright holders of the music contained in the sound recording). The reason for this discrepancy appears to be that radio broadcasters have argued, and it is generally accepted, that radio play benefits record sales and thus there is no need for radio broadcasters to purchase the rights to broadcast the sound recording. This impact of radio play on record sales is commonly referred to as a "symbiotic" relationship between these two industries. Yet there appears to be no systematic examination of this relationship. In this paper I present evidence indicating that radio play does not benefit overall record sales. There are obvious implications for copyright. I also examine, by way of comparison, television's negative impact on the movie industry.

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Music Product as a Durable Good and Online Piracy

Review of Economic Research on Copyright Issues, Vol. 3, No. 2, 53-66, 2006

Sougata Poddar

Downloads:  736


Abstract

Music is typical experience good and the formats in which music is available; for example, CDs and cassettes or downloaded files are durable in nature. Using these two typical characteristics of the 'music product', in this paper, we develop an analytical framework to study the economic implications of online music piracy. On one hand, we show that no protection against piracy is never optimal for the legitimate music producer; on the other hand, we show that complete protection against piracy may not always be the best option; the decision on the degree of limiting piracy depends on the extent of the informational value of music downloads, cost of piracy and the quality of the downloaded music and as a result a partial protection can be optimal to the music producer.

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